Cloud Economics

Cost savings are central to the business case for cloud computing but can never be assumed in government. This section on cloud economics intends to explore the potential for cost savings along with the many considerations that complicate the equation for governmental organizations looking to transition their IT services to the cloud.

Data center operators often wonder how to make more revenue within their existing facility. Partnering with a cloud services provider may boost their capacity and performance, without a lot of overhead.

After more than a decade of debate and a record-setting proceeding that attracted nearly 4 million public comments, the time to settle the Net Neutrality question has arrived. This week, I will circulate to the members of the Federal Communications Commission (FCC) proposed new rules to preserve the internet as an open platform for innovation and free expression. This proposal is rooted in long-standing regulatory principles, marketplace experience, and public input received over the last several months.

From my standpoint, Microsoft’s flexibility when it comes to how businesses or individuals want to pay for software could be very important. Over the past year, it has completely overhauled its volume licensing policies. I won’t bore you with all the details, but the biggest change is this: instead of charging companies for software on a per-device basis, it will price subscriptions and licenses based on who actually uses them. It will also emulate Apple’s strategy of free operating system updates with the Windows 10 release.

At a time when technological change is measured in nanoseconds, experts in information systems are focused on longer-term trends that will position their communities to take advantage of the convenience and efficiency of technology. At the same time, they are working overtime to ensure the safety of their systems and protect vital information from hackers. Regardless of the benefits and potential dangers of technology, everyone agrees that technology in 2020 will only be more important.

"This quarter's results show the product and business transformation underway at Microsoft," said Microsoft CEO Satya Nadella during the company's earnings call on Jan. 26. "We saw success in a number of our strategic areas, including cloud adoption, redefining and revitalizing the Windows ecosystem, and improving economics in our hardware portfolio."
Microsoft is in the midst of a transformation to become the productivity and platform company for the mobile-first and cloud-first world, Nadella said. In essence, the company is moving from selling packaged software to selling services via subscription.

While the public cloud wars continue to rage among Google, Amazon and Microsoft, over the course of this year, we're likely to see a quiet storm gathering around cloud platforms.
Cloud platforms are typically less well understood architecture but serve as a growing greenfield for enterprise innovation, application creation and business agility. Why is the platform coming into its own? Look at these milestones concerning domain maturity and growth...

It’s 2015, and it’s safe to say that many of us have our heads in the cloud. We’re using more mobile devices, requesting even more data from a variety of data center points, and are demanding even more from the infrastructure that is designed to support the next-generation cloud platform. Data centers are becoming massive hubs for multi-tenant environments which are continuously being tasked for more resources and are experiencing even more utilization.

For development teams, cloud computing is enthralling. Where’s the best place for distributed developers, telecommuters and contractors to reach the code repository? In the cloud. Where do you want the high-performance build servers? At a cloud host, where you can commandeer CPU resources as needed. Storing artifacts? Use cheap cloud storage. Hosting test harness? The cloud has tremendous resources. Load testing? The scales. Management of beta sites? Cloud. Distribution of finished builds? Cloud. Access to libraries and other tools? Other than the primary IDE itself, cloud. (I’m not a fan of working in a browser, sorry.)

The space agency uses Amazon Web Services to provide the backbone for its new Drupal content management system, and has worked out an interesting way to pay for the cloud, explained Kadakia. NASA’s uses a contract vehicle called Solutions for Enterprise-Wide Procurement (SEWP) that functions like a drawdown account between NASA and Amazon.
The contract vehicle takes in account that the cost of paying for cloud services can fluctuate based on needs and performance (a site might get a spike in traffic on one day and then have it drop the next day). Kadakia estimates that NASA could end up spending around $700,000 to $1 million for AWS for the year; the agency can put in $1.5 million into the account that can cover any unforeseen costs, and any money not spent can be saved.
“I think of it like my service card,” she said. “I can put 50 bucks in it. I may not use it all and I won’t lose that money.”

Doug Wolfe—a 30 year CIA veteran—has a tough job. As CIA’s Chief Information Officer (CIO), Wolfe is responsible for ushering the Agency into the 21st century with state-of-the-art computing technology while ensuring our systems are secure. As a pioneer of cloud computing at CIA, Wolfe spearheaded a new way of doing intelligence work that allows for increased collaboration across the 17 Intelligence Community (IC) agencies.